Serbia and the International Monetary Fund have agreed that the country's central bank would spend no more than 4.0 billion euro ($4.8 billion) to back the flagging local currency, the dinar
, local media reported on Monday.
It was not immediately clear what time period the agreement for a cap on central bank foreign exchange interventions referred to.
Serbia's central bank, NBS, sold about 1.0 billion euro in the first five months to prop up the dinar, Danas (www.danas.rs) news daily quoted the consultant of Serbia's Chamber of Commerce's bureau for regional cooperation, Dejan Jovovic, as saying. In his opinion Serbia's foreign exchange reserves should not fall below the country's six-month imports.
NBS sold 656.9 million euro in defence of the dinar last year and about 1.3 billion euro in 2008, Danas quoted Jovovic as saying.
"The fact is, as well, that the Serbian interbank market is very shallow, so even low purchases of foreign currency can affect the dinar. Last year, for example, the average daily turnover at the interbank totalled only 28 million euro while this year it rose to about 40 million euro," Jovovic added.
The dinar has shed some 7.4% of its value against the euro since the start of 2010, NBS data showed.
Serbia's total foreign exchange reserves edged down to 11.955 billion euro in April from 11.975 billion in March, NBS said last month.
The country's fiscal policy is tied to its two-year, 3.0 billion euro stand-by funding deal with the IMF that expires in the spring of next year.
Source: SeeNews - 08/06/2010It was not immediately clear what time period the agreement for a cap on central bank foreign exchange interventions referred to.
Serbia's central bank, NBS, sold about 1.0 billion euro in the first five months to prop up the dinar, Danas (www.danas.rs) news daily quoted the consultant of Serbia's Chamber of Commerce's bureau for regional cooperation, Dejan Jovovic, as saying. In his opinion Serbia's foreign exchange reserves should not fall below the country's six-month imports.
NBS sold 656.9 million euro in defence of the dinar last year and about 1.3 billion euro in 2008, Danas quoted Jovovic as saying.
"The fact is, as well, that the Serbian interbank market is very shallow, so even low purchases of foreign currency can affect the dinar. Last year, for example, the average daily turnover at the interbank totalled only 28 million euro while this year it rose to about 40 million euro," Jovovic added.
The dinar has shed some 7.4% of its value against the euro since the start of 2010, NBS data showed.
Serbia's total foreign exchange reserves edged down to 11.955 billion euro in April from 11.975 billion in March, NBS said last month.
The country's fiscal policy is tied to its two-year, 3.0 billion euro stand-by funding deal with the IMF that expires in the spring of next year.
